Bengal Energy announces commissioning of the Cuisinier to Cook pipeline and Production Update from Cuisinier Oil Wells in Cooper Basin, Australia
CALGARY, June 7, 2013 /CNW/ - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") today announces that the Cuisinier to Cook liquids pipeline located on the Barta sub-block ("Barta Block") of Authority to Prospect ("ATP") 752P in the Cooper-Eromanga Basin in Queensland, has now been commissioned and production from all eight Cuisinier oil wells has now commenced. Bengal has a 25% net interest in the 360,000 acre Barta Block. This is an important development for Bengal, because it enables production from the previously drilled 8 Cuisinier wells to be delivered to sales points through a pipeline, rather than trucking. As a result of this pipeline connectivity, volatility in production volumes can be reduced, with opportunities to potentially enhance netbacks. For the last fiscal year ending March 31, 2013 Bengal's field netback on this high quality Cuisinier production was approximately CAD$70 per barrel.
Upon confirming the pipeline commissioning, the Operator also provided updated production guidance to its JV Partners of a combined oil production from the eight wells during the startup phase of 1400-1500 barrels of oil per day ("bopd") gross (350 to 375 bopd net to Bengal). Although this represents an increase of approximately 250 bopd prior to commissioning, this updated production guidance will result in Bengal realizing calendar Q2 exit production volumes in the 350-375 bopd range compared to the 500+ bopd previously forecast. The Operator also indicated that further optimization of the system may be available which could potentially add incremental barrels. For reference, the gross field production was approximately 1150 bopd in the month of May, 2013.
Completion and tie in work for the oil wells drilled during the 2013 Cuisinier appraisal drilling campaign is expected to commence in July 2013 and should result in further production volume additions by the end of the third quarter of this calendar year. Bengal will continue to work closely with the Operator to understand the performance of all wells drilled in Cuisinier, to ensure forecast production numbers are as accurate as possible, and will provide further guidance regarding year end exit production as information becomes available.
Produced oil is being processed through the Cook oilfield production and de-watering infrastructure with approximately 1,400 barrels of oil per day then being delivered to the sales point at this time through the Cook to Merrimelia Oil Pipeline ("CMOP").
"Having pipeline connectivity is an important development for the Cuisinier program, which will result in optimized delivery of Bengal's oil to sales points now and in the future, compared with trucking. Bengal will continue to work with the Operator to ensure maximized production volumes are delivered. We will update shareholders with details on production as the Operator provides data, and as the 5 wells drilled in the 2013 drilling campaign are also tied-in. Bengal continues to strongly believe in the potential of our acreage across multiple geological horizons on this block," commented Chayan Chakrabarty, President & CEO of Bengal.